Chris Lombardi puts defense and security under the spotlight, as he shares his takes on recent NATO and EU cooperation and provides insight into the company’s own long-term strategic partnerships in Europe.

Three trends are currently driving the global electricity sector: decarbonization, decentralization and differentiation. Utilities are making significant contributions to mitigate carbon emissions, while a technology revolution is …

EU member states and MEPs have reached a deal on new rules governing the trade of financial derivatives.

Denmark, which holds the presidency of the EU’s Council of Ministers, brokered a compromise deal that will require all derivative trades to go through central counter-parties (CCPs). The CCPs are supposed to protect both the buyer and seller of a derivative if one or other fails to honour its side the trade.

The rules are designed to reduce the risk of derivatives trading creating financial-market instability and prevent events such as the collapse in 2008 of Lehman Brothers, a US investment bank that was heavily exposed to derivatives. Lehman’s bankruptcy was one of the main triggers of the financial crisis.

Derivatives are products based on financial assets such as shares and bonds. They allow investors to guard against future price fluctuations or bet on price movements. The market for derivatives was worth over €300 trillion last year.

All derivative trades will have to be reported to trade repositories, or data centres, which will allow financial-market regulators to have an overview of the derivatives market.

The Danish presidency achieved agreement after resolving a stand-off between the Council of Ministers and MEPs over how CCPs are approved.

Under the compromise, a decision to approve a CCP by a group of national financial-market regulators can be blocked by two-thirds of its members. The decision would then be referred to the European Securities Market Authority (ESMA) for mediation. The outcome of this mediation will be binding.

The two sides also agreed that the new rules for derivatives would be reviewed after three years. The Parliament had wanted a review after one year.

Margrether Vestager, Denmark’s economics minister, said: “The rules are a big step towards counteracting future financial crises, as they reduce the risk of contagion from a crisis-hit financial institution ‘infecting’ the rest of the financial system via derivatives markets.”

Michel Barnier, the European commissioner for the internal market, said the agreement would provide “more stability, transparency and efficiency in derivatives markets”. He said the rules would require all trades to be reported so that policy-makers and supervisors would have a clear view of what was going on in the markets. “The era of opacity and shady deals is over,” he said.

Werner Langen, a German centre-right MEP who represented the Parliament in negotiations, said the agreement was a “big step towards a more transparent and safe market for OTC [over the counter] derivatives”. He highlighted the stronger role for the ESMA in authorising CCPs as a positive achievement.

The deal will have to be approved by a plenary vote in the European Parliament and backed by the Council of Ministers.